SEC CRASHES ALTERNATIVE 40-ACT PARTY

摘要

The Securities and Exchange Commission's (SEC) rule 18f-4 set rules for the use of derivatives in 40-Act mutual funds in a 420-page release titled: "Use of Derivatives by Registered Investment Companies and Business Development Companies." Implicit in the language - and the title - is the notion that the SEC will allow 40-Act funds some room to use those risky derivatives products under certain conditions. In fact, previous rules on this were constructed in order to delineate the amount of derivatives. The idea being equity- based mutual funds were trading a great deal of S&P futures to hedge equity exposure. Its previous guidance in a way of speaking opened up a Pandora's Box, which allowed clever industry participants to drive a truck through. This partially is responsible for the ability of managed futures programs to be reconfigured into a 40-Act product, which allowed it to be offered through a much broader distribution network.